China to take small steps towards oil price liberalization- John Bishop

China will likely take a step-by-step approach towards liberalizing domestic prices for oil and oil products following this year’s National People’s Congress which is to due to conclude today, analysts said.

China’s policymakers must balance the needs of its rural poor who would be hurt by any increase in prices for oil products, with the bottom lines of its battered oil refiners, whose health is crucial to China’s long-term economic growth.

‘There is talk of reforms being rolled out after the National People’s Congress meeting. This reform could add more upward pressure to prices through 2006-2007 if the moves were substantial, but there is reason to be skeptical about how substantial the impact will be,’ said Stephen Green, an analyst with Standard Chartered.